Before Manatee schools meltdown, missed signs

Published: Thursday, February 21, 2013 at 3:36 p.m.

Last Modified: Thursday, February 21, 2013 at 3:36 p.m.

MANATEE COUNTY - School officials trying to figure out how a financial meltdown occurred, and why they learned about it so late, focused on a meeting that took place last August.

Five weeks before revealing a $3.4 million budget deficit to board members and the public on Sept. 7, former superintendent Tim McGonegal held a meeting to discuss a “potential” deficit with a small group of six employees.

The mood was calm. Everyone thought the deficit was a mistake. It would “go away,” an accounting manager would later tell forensic auditors hired in the fall to unearth the cause.

At a special meeting in the Manatee County Commission chambers, two investigators from the global consulting firm Navigant spoke to members of the school board, audit committee and the public, who wanted to know why no one saw the signs for more than $8 million in overspending for the 2011-12 school year sooner.

Only two members of the public spoke at Thursday's meeting, where the board reflected on the events that rocked the district this school year.

School board member David Miner questioned if mistakes that included replacing the computer program that tracked hiring in the district for a faulty manual process were gross negligence.

“I would think that competent people in charge of a district would know already that they should have been doing these things,” Miner said.

Robinson said that many in the finance department in 2009 and 2010 were new, and some didn't have experience specifically in school finance.

“It was a difficult time,” Robinson said. “Position control that had been used for ten years to develop the budget was turned off at that time — a decision they didn't make.”

Chief Financial Officer Michael Boyer, hired last May after the 2011-2012 budget was developed, has always maintained that the public doesn't quite understand how big of an impact the decision to pull position control was and what a burden it placed on employees.

“You have to understand this was done manually,” Boyer said of the budget. “To do this manually for 5,500 employees is so much work.”

Board member Julie Aranibar placed responsibility on the board.

“I see the responsibility on the board, not necessarily the person in finance who was following a directive,” Aranibar said. “But what this says to this board is that multiple systems failed. And the board was not notified.”

Investigators said that after a Aug. 2 meeting McGonegal commanded silence until the deficit could be confirmed — a process they say took three weeks.

“Stall mode” began, according to audit notes. Accountants rushed to finalize reports and close the books while waiting for McGonegal to break the news to school members.

Not one person — not the director of finance, the retired assistant superintendent blamed for lack of oversight in reports, or McGonegal himself — said they were aware of the deficit before the summer of 2012. But almost all of those present at that August meeting, and many other district employees who were not informed of the crisis until McGonegal's Sept. 7 public announcement, were aware of at least one of the components that attributed to the deficit.

An Auditor General report in the fall of 2011 warned of the potential to miscalculate federal funds. Finance mangers Sheina Runions — one of two who planned the budget — said her warnings to Drake about discrepancies in the benefits calculations were ignored. She would later warn Boyer of potential problems stemming from the decision to eliminate the retroactive pay cut within two weeks of his May start date.

And from October 2011 to February 2012, as board members demanded more detailed financial statements, finance employees were well aware of a series of index allocation and benefits calculations errors that wouldn't be fixed until mid-year adjustments were made in February. Other employees had been informed of a potential textbook deficit as early as May 2012.

For some board members, information still doesnNOTEEndNOTEStart't add up.

“That just doesn't pass the smell test, ” Miner said of McGonegal's timeline for discovery. “That Dr. McGonegal didn't suspect significant problems in the budget at that point.”

Still, several of the fifteen or so district employees that attend Thursday's meeting spoke of the need to move on.

Boyer was in good spirits Thursday — he said the first phase of efforts to fix the budget process been finalized as of a week ago.

Position control, payroll encumbrances and requisition have been built back into the budget process. No longer will teachers that the district can't afford to pay be hired.

“You are going to have six phases of approval before someone can be hired,” Boyer said. “And it will stop at the board.”

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